Debt collection litigation was the primary reason for bankruptcy given by 78% of respondents in a Center For Consumer Recovery study, with another 72% citing excessive credit card spending.

"The economy is improving, but many people are continuing to suffer the ripple effects of a terrible recession," says Mike Sullivan, chief education and operations officer for Take Charge America, a Phoenix, Ariz., nonprofit credit counseling organization. "For some, bankruptcy is the only option, but the process of declaring bankruptcy is very complicated."

In addition to the paperwork, filers must have a budget briefing session with an approved, nonprofit budget and credit counseling agency and complete an approved personal financial management instructional course, notes Take Charge America.

If you believe you're slipping closer to bankruptcy, take steps to keep you solvent or at least buy time:

Check your credit. Visit annualcreditreport.com to get a free, once-a-year look at your credit report. Look for all debts, even if the debt collectors have stopped calling.

Talk to your creditors. Get ahead of debt problems by going directly to a creditor you're having problems paying back. Explain why you're behind on your payments and see if they can accept lower payments until you can catch up. Some payments are better than no payments, and even the minimum might keep you out of financial hot water.